29th June 2023
Decisions made by the IMO this summer will shape the future of the industry’s efforts in tackling climate change. It is crucial for the IMO to embrace its responsibility and lead the sector towards a net zero future by 2050
Eight shipowners’ associations have come together to agree on a way forward for shipping at next week’s MEPC80 meeting. It calls for a pragmatic and ambitious commitment with a just and equitable transition
JULY 2023 is a pivotal month for global shipping. Representatives from 175 countries will gather in London to decide on the binding climate path that shipping needs to take towards 2050. The IMO will be at the epicenter of intense political and technical negotiations that will define its role in climate history.
It is of paramount importance to reach an agreement that provides certainty and reduces risks for the enormous investments that will be required, both within the shipping sector and across the maritime value chain, including fuel producers, infrastructure and ports.
Despite the fact that the co-signers of this column may have different views on some of the agreement’s details, we all share a strong common wish for the IMO to succeed in July and call upon member states to make it happen.
We even offer member states a recipe for success:
First and foremost, the outcome of the negotiations must reflect that the sector is committed and takes its share of responsibility consistent with the 1.5 degree target set in the Paris Agreement. This requires that IMO sets a target of achieving net zero emissions by 2050, which implies that greenhouse gas emissions from international shipping must peak as soon as possible. This underscores the urgency of making decisions without delay.
Secondly, member states need to agree on an ambitious timeline and framework for a technical and economic measures that allows to reach the net zero target by 2050, acknowledging the significance of the availability and supply of clean fuels for the industry, while ensuring a level playing field. To this end these measures must be both straightforward and enforceable.
One important technical measure should be the establishment of a global fuel standard that gradually reduces the climate footprint of fuels over the years, ultimately leading to net zero emissions by 2050. This would provide a clear signal to shipping companies and, equally importantly, give fuel producers and suppliers certainty about the expected demand for new fuels. Such clarity is crucial for mitigating investment risks.
A technical measure should be supplemented by an economic measure, such as a levy. This will be essential to incentivize the adoption of renewable fuels. It will contribute to bridging the price gap between fossil fuels and renewables. Additionally, it will reward fuel efficiency, as fuel not combusted is both the cleanest and most cost-effective option, leading to a win-win situation.
Finally, such an economic measure would generate financial resources that are imperative to support the climate path of shipping. Moreover, a portion of these resources must be allocated to assist Least Developed Countries and Small Islands Developing States to support a just and equitable transition. This commitment lies at the heart of the IMO’s mission and should be honored reflecting a pragmatic and ambitious balance.
We need to act now, so in summary, our call to member states can be best expressed by Mark Twain: “Twenty years from now you will be more disappointed by the things that you didn’t do than by the ones you did do. So throw off the bowlines. Sail away from the safe harbour. Catch the trade winds in your sails. Explore. Dream. Discover.”